The Employee Provident Fund or the EPF is a retirement benefits scheme for salaried employees in the private sector. The Employees Provident Fund Organisation (EPFO) manages the EPF. Any organisation or firm with 20 or more employees gets covered under the EPFO. The Employees Provident Fund Organisation operates three schemes.
The employees who fall under the EPF scheme make a fixed contribution of 12% of the basic salary and the dearness allowance towards the scheme. The employer should also make an equal contribution to the EPF scheme. The EPFO Central Board of Trustees fixes the EPF interest rates after consulting the Ministry of Finance. The EPF Interest Rate is fixed at 8.15% for FY2023.
The employee would get a lump-sum amount at retirement, which includes the contributions of both the employee and the employer with the interest payments. However, 12% of the employer contribution does not go to the EPF account. Out of the 12% contribution, 8.33% goes towards the Employee Pension Scheme Account, and the remaining 3.67% goes to the employee EPF account.
It is compulsory for all employees who draw a basic salary of less than Rs 15,000 per month to become members of the EPF. You cannot opt-outopt-out of the EPF scheme once you become a scheme member. An employee can make an enhanced contribution up to a maximum of 100% of the basic salary to the voluntary provident fund. The employer will not match the contribution.
The EPF calculator is a simulation, which shows you the amount of money that will accumulate in your EPF account at retirement. You can calculate the lump-sum amount, which includes both your contribution and the employer’s contribution, along with the accrued interest on the investment.
The EPF calculator has a formula box where you enter your current age, your basic monthly salary and the dearness allowance, your contribution to the EPF and your retirement age up to 58 years. You can also enter the current EPF balance if you know the figures. After entering the requisite information, the EPF calculator will show you the EPF funds available at retirement.
To understand how the EPF calculator works, let us have an example.
Employees basic salary + dearness allowance = Rs 14,000
Employees contribution towards the EPF = 12% * 14,000 = Rs 1,680
Employers contribution towards the EPF = 3.67% * 14,000 = Rs 514
Employers contribution towards EPS = 8.33% * 14,000 = Rs 1,166.
The total contribution by the employer and employee towards the EPF account of the employee = Rs 1,680 + Rs 514 = Rs 2,194.
The interest rate is 8.15% for FY 2022-23.
So the interest rate applicable for each month is:
8.15%/12 = 0.679%
Assuming the employee joined the Firm XYZ in April 2019. The total EPF contribution for April will be Rs 2,194. The EPF scheme will not pay any interest for April.
The total EPF contribution for the month of May = Rs 4,388 (Rs 2,194+ Rs 2,194). He receives an interest of Rs 4,388 * 0.679% = Rs 29.79.
Similarly, the calculation is done for the subsequent months.
Number of Years of Service | Eligible Portion of EPS Withdrawal* |
---|---|
1 | 1.02 |
2 | 1.99 |
3 | 2.98 |
4 | 3.99 |
5 | 5.02 |
6 | 6.07 |
7 | 7.13 |
8 | 8.22 |
9 | 9.33 |
*Effective from 10 June 2008 as stated by the EPFO website. Irrespective of the last drawn salary, the maximum salary considered for this calculation is Rs 15,000. Therefore, if your last drawn salary is Rs 42,000 and you have worked for eight consecutive years, the EPS amount you can withdraw is Rs 15,000 * 8.22 = Rs 1,23,300.
Step 1. Visit the government EPF portal
Step 2. Select the location (state, regional branch office) of your PF office
Step 3. Fill the online form with your personal information and the EPF account number shown on your payslip
Step 4. Submit the form after verifying the details provided
Step 5. If all your records are in place, your EPF balance will be sent as an SMS to your registered mobile number.
Step 1. In the event of a job change, EPF can be transferred using the Universal Account Number (UAN), which will remain the same
Step 2. Go to the official EPF member portal and complete the registration
Step 3. Log in once you get the login credentials
Step 4. Visit the Online Transfer Claim Portal and request for EPF transfer using the same login details as above
Step 5. If you are eligible to make the transfer claim online, you can do it without having to submit Form 13
Step 6. Click ‘Request for Transfer of Funds’ and enter your old employment details as directed
Step 7. Get it authenticated by your previous or new employer
Step 8. After entering the details, you will receive a PIN on your mobile
Step 9. Use the tracking ID generated for you to track your application.